If you are self-employed getting a mortgage approval for a traditional mortgage could require more documents and time than it would take for an employed borrower if you are looking for the lowest mortgage rate. Based soley on income, it is easier to calculate the income of an employed borrower once they produce their T4. If a self-employed borrower owns a company a take an income via at T4, then income is obvious. Should they not qualify with that income, other options like reviewing the business financials would be necessary.
Without a T4, the risk to the lender may appear greater than it would be to qualify for a traditional mortgage, lenders use the income you pay income taxes on and depending on whether your company is registered as a corporation, partnership or sole proprietorship, there will be different requirements.
Though our partnership with our many lenders we successfully provide mortgage for self-employed borrowers for home purchases, business loans, home renovation loans, debt consolidation among others
Lenders usually ask for 2 years proof of income from a self employed borrower by way of tax returns, Notice of Assessments, bank statements, business license to verify the borrowers income.
A business owner needs as little as 5% down to buy a house if the income provided satisfied the GDS and TDS guidelines. You will still be able to buy a home if you don't satisfy those guidelines. The interest rate will be higher.
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